Spread Bets News - August 2008
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Weekly Online Spread Bet Comment, update 11 Aug 08
Part 1 - Trading News - Last Week's Markets
Part 2 - Economic Indicators and Company Results
Part 3 - The Financial Press, what the papers said
Trading News - Last Week's Markets
Central banks provided the major stimulus for action this week on the markets. The US Fed, Bank of England, and the ECB all announced no change in their latest interest rate decisions. However, as usual, it was the accompanying statements from the Fed and the ECB which were followed carefully. A common theme emerged: increasing risks to economic growth. This was reinforced by a surprise cut from the Czech central bank and a dovish statement from the Australian Reserve. It looks like the world economy (and not just the US economy) is in a worse state then previously anticipated.
This negatively affected commodities prices, which are dependant on a resilient world economy and decoupling the US economy. Oil, Gold and most other commodities had another dreadful week. Interestingly, the Dollar strength this week has had little to do with developments in the US itself, as the Fed statement was very balanced. Instead it was due to weakening Dollar crosses.
The fall in commodity prices and the more dovish central banks gave a substantial boost to world equity markets. The FTSE gained 3.1%, DAX 3.2%, S&P 2.6% and NASDAQ 5.1%. But despite an amazing opening ceremony, the Chinese markets showed no Olympic cheer on Friday, as the Shanghai Composite dropped 4.5%.
Equities Spread Bets
As we pass the first anniversary of the credit crunch, bank earnings continue to suffer. Royal Bank of Scotland announced a £691m loss - the first time it had fallen into the red. This prompted CEO Sir Fred Goodwin to issue an apology to shareholders. Barclays Chief, John Varley, was also apologised as their profits slipped 68% to £524m. In the States, Fannie Mae and Freddie Mac badly missed already low expectations, resulting in their share prices losing 23% and 26% respectively.
The Irish ISEQ index gained over 10% on the week, aided by strong financial sector gains and a surging Ryanair.
Forex Spread Bets
Officials in Japan have finally admitted that the country has probably entered a recession. In the Forex markets this has allowed the USD YEN to gain 2.3% to 110.20. In Europe, Trichet said that downside risks are materialising, resulting in EUR USD shedding a whopping 3.4% to stand at barely over $1.50. GBP USD was dumped 2.70% to finish the week at an even $1.92.
Gold Spread Bets - Crude Oil Spread Bets
Commodities tumbled this week due to deteriorating growth prospects in world economies. Oil markets took the worst beating as Crude lost 8.9%. Less than a month after touching $146, Brent Crude is now barely over $113.
Gold didn’t fare much better, as it lost 5.9% to close at $856.70. Technically, it now stands at a crucial support level.
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Spread Bets - Economic Indicators and Company Results
Week Commencing 11 Aug 08
Inflation will be the key theme on the markets this week. UK CPI is out on Tuesday, with the Eurozone and US data following on Thursday. The US has key economic releases this week with the ever-interesting Trade Balance figure due on Tuesday and the ever-important Retail Sales released on Wednesday. There are only a precious few earnings reports from the US and UK this week, with Wal-Mart topping the bill. This gives a chance to focus more on German equities for a change, where there are plenty of earnings to keep traders occupied. Big hitters like Hypo Real Estate and ThyssenKrupp will be followed closely.
Monday
Economic Indicators
UK: 09.30 Producer Price Index, 09.30 Trade Balance
EU: 07.45 French Industrial Production, 09.00 Italian CPI, 09.00 Italian Budget Balance
Results
IRE: Smurfit Kappa
US: Fluor Corp, SYSCO Corp
Tuesday
Economic Indicators
UK: 09.30 CPI, 09.30 Retail Price Index
EU: 13.00 French Terms of Trade
US: 12.45 ICSC-UBS Retail Chain Store Sales, 13.30 Trade Balance, 13.55 Redbook Retail Sales Index, 14.00 TIPP Economic Optimism, 15.00 Job Vacancies, 19.00 Treasury Budget
Results
UK: Thomson Reuters
IRE: United Drug trading statement
EU: Bilfinger Berger, Aareal Bank, Celesio
US: Applied Materials, NVIDIA Corp
Wednesday
Economic Indicators
UK: 09.30 Average Earnings, 09.30 Unemployment Rate
IRE: National Income and Expenditure 2007
EU: 08.00 Spanish CPI, 10.00 Eurozone Industrial Productions
US: 12.00 MBA Purchase Applications, 13.30 Export and Import Prices, 13.30 Retail Sales, 15.00 Business Inventories, 15.35 Crude Oil Inventories
Results
IRE: Anglo Irish Bank trading statement
EU: K+S, Arcandor, Q-Cells, Stada Arzneimittel, United Internet, Hypo Real Estate Holdings
US: Deere & Company, NetApp
Thursday
Economic Indicators
IRE: Industrial Disputes
EU: 07.00 German GDP Flash, 07.45 French GDP Flash, 08.00 Spanish GDP Flash, 10.00 Eurozone GDP Flash, 10.00 Eurozone HICP, 15.00 German Productivity and Labour Costs
US: 13.30 CPI, 13.30 US-Real Earnings, 13.30 Initial Jobless Claims, 21.30 Money Supply
Results
UK: Bellway trading statement
EU: Hochtief, Salzgitter, Solarworld, ThyssenKrupp, TUI
US: Agilent Technologies, Autodesk, Wal-Mart
Friday
Economic Indicators
IRE: Employment in Construction
EU: 07.00 German PPI, 09.00 French Money Supply, 15.30 German Bank Lending to Individuals
US: 13.30 Empire Manufacturing Index, 14.00 Treasury International Capital Flows, 14.15 Industrial Production, 15.00 University of Michigan Consumer Sentiment Prelim
Results
n/a
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The Financial Press, what the papers said:
Last update: 11 Aug 08
The Scotland on Sunday is reporting that inflation may surge beyond 4% this week amid fears mount that it could push it as high as 5% by September.
Like the rest of the financial sector, Ulster Bank struggled to support RBS, but an €486 contribution wasn’t too bad in the first half of the year.
According to the Times, BAE Systems is looking to deal a significant aircraft to Saudi Arabia. This will however reawaken bribery allegations made over earlier arms sales to the Gulf kingdom.
The Scottish government is in talks with two Middle Eastern sovereign wealth funds to provide the cash for a £4.8bn offshore energy grid according to the Independent.
According to the Telegraph, America's biggest delivery giant United Parcel Service is plotting a near £8bn bid for Dutch rival TNT.
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"Spread Bets News - August 2008" written by paddy power trader, last updated 11-Aug-2008
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